The opinion of the court was delivered by: SHIRLEY WOHL KRAM
MEMORANDUM OPINION AND ORDER
SHIRLEY WOHL KRAM, U.S.D.J.
In this diversity action, plaintiffs Kenneth and Laura Conte (the "Contes") seek to recover damages for personal injuries which they allegedly suffered in an automobile accident. Defendant Karen Justice ("Justice") moves, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for an order granting her summary judgment dismissing the complaint on the basis that the Contes are collaterally estopped from litigating the issue of liability for their personal injuries as that issue was already conclusively determined in prior state court actions. In the alternative, Justice moves, pursuant to Rule 15 of the Federal Rules of Civil Procedure, for an order granting her leave to amend her answer to include the defense of collateral estoppel.
On June 24, 1989, plaintiff Kenneth J. Conte, while in an automobile which he owned and was operating, collided with a car driven by defendant Justice in Dutchess County, New York (the "Accident"). There were four passengers in Conte's vehicle, namely, co-plaintiff Laura Conte, Kenneth's wife, the plaintiffs' infant son, Christopher, and Randy and Ronna Weinberg (the "Weinbergs"), Conte's neighbors. Kenneth Conte and his four passengers were, and continue to be, citizens of the State of New Jersey. Justice was, and continues to be, a citizen of the State of New York.
On October 9, 1989, the Weinbergs instituted an action against Kenneth Conte and Justice in the New York State Supreme Court, New York County, entitled Weinberg v. Justice and Conte, Index No. 5267/89 (the "Weinberg Action"). Plaintiff Randy Weinberg alleged various personal injuries arising from the collision and sought damages of $ 10 million. Plaintiff Ronna Weinberg sued for loss of her husband's consortium and sought damages of $ 500,000.
On December 13, 1989, Justice commenced an action against Kenneth Conte in New York State Supreme Court, Dutchess County, entitled Justice v. Conte, Index No. 1129/90 (the "Justice Action"). She alleged various personal injuries arising from the collision and sought damages of $ 1 million.
On December 19, 1989, defendants in the Weinberg Action moved for an order transferring that action to Dutchess County. On March 2, 1990, the Supreme Court (Juidice, J.) granted the motion, designating Dutchess County as the proper venue for the Weinberg Action. On June 27, 1990, Justice moved to consolidate the Weinberg and Justice Actions in Dutchess County, and on July 25, 1990, the Supreme Court granted the motion.
By filing a summons and complaint July 20, 1990, Christopher Conte, by his mother, Laura, commenced an action against his father, Kenneth, and Justice in New York State Supreme Court, Dutchess County, entitled Conte v. Justice and Conte (the "Conte Action"). In the Conte Action, Christopher Conte alleged various personal injuries and seeks damages of $ 1 million.
On or about July 16, 1990, plaintiffs Kenneth and Laura Conte commenced the instant action seeking to recover damages arising from the same collision that is the subject of the Weinberg, Justice and Conte Actions, pending in the New York State Supreme Court, Dutchess County (together, the "State Court Actions"). In this action, Kenneth Conte alleges various personal injuries and the loss of his spouse's consortium and seeks damages of $ 850,000. His wife, Laura, seeks identical relief. Justice interposed an answer to the complaint denying its material allegations.
On February 28, 1991, this Court ordered a stay of the proceedings pending the outcome of the State Court Actions. The State Court Actions were consolidated for trial and, on September 26, 1991, a jury returned a verdict finding Kenneth Conte negligent and 100% at fault and finding that Justice was not culpable.
Thereafter, the Justice Action was settled prior to the entry of judgment. On November 12, 1991, a final judgment was entered in the Weinberg and Conte Actions (the "Judgment"). The Judgment adopted the jury verdict and reflected its determination that Justice was not culpable, dismissed the complaints in the Weinberg and Conte Actions as against Justice and adjudged all claims and cross-claims against Justice dismissed.
Justice now moves for summary judgment in the instant action, or, alternatively, for an order granting her leave to amend her answer to allege that the Contes are collaterally estopped from litigating the same liability issue in federal court. The Contes contend that collateral estoppel does not apply as the Justice Action was settled prior to the entry of final judgment. According to the Contes, even if the Judgment is "final" for purposes of issue preclusion, collateral estoppel does not apply because there was insufficient incentive for Kenneth Conte to litigate the State Court Actions, and Laura Conte was not a party to the prior suits in which judgment was rendered.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Adickes v. S.H. Kress and Co., 398 U.S. 144, 157 (1970). The movant may discharge this burden by demonstrating to the Court that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The non-moving party then has the burden of coming forward with "specific facts showing that there is a genuine ...